In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Tag: federalism

Senator Kent Conrad (D-ND) has a reputation for being a “deficit hawk.” But the bar is apparently so low in Washington that merely paying lip service to “fiscal responsibility” is enough to earn you the hawk title in the press. In reality, Conrad is a tax and spender as a story in today’s Wall Street Journal demonstrates.

“Like many in Congress, he is conflicted. He boasts a 23-year record of looking after North Dakota voters with ample farm subsidies, aid for drought-hit ranchers, defense spending and scores of pet projects. He has done little to help rein in Medicare and Social Security expenses—the U.S.’s biggest budget busters.”

“He has been a defender of the state’s grain farmers ever since [his election to the Senate in 1986]. He voted last April against a proposal to cap federal payments to the nation’s farmers at $250,000 per farmer per year, a measure that Mr. Conrad criticized as disastrous but that supporters said would have saved $1 billion a year.”

“He also helped draft a five-year, $300 billion farm bill in 2008 that boosted overall farm subsidies. The bill created a $3.8 billion emergency ‘trust fund’ for farmers who lose crops or livestock to natural disasters, which was Mr. Conrad’s idea. Since 2008, North Dakota ranchers have received $23 million under the fund, second only to Texas.”

“Mr. Conrad also has used legislative earmarks—provisions inserted into bills by lawmakers to fund local projects—to deliver federal money to North Dakota businesses, cities and schools. He secured $3 million last year to build a new terminal at the Grand Forks airport, and $13 million more for a fire station at a nearby air base. Dickinson State University got $600,000 to build a Theodore Roosevelt Center, while a Navy research project got $1.2 million to develop a ‘chafing protection system.’ ”

“In 2003, Mr. Conrad joined most Democratic senators to support Mr. Bush’s plan to provide Medicare prescription-drug coverage to seniors, at a cost of around $40 billion a year. The plan required Congress to scrap the spending controls Mr. Conrad once championed. Republicans won the votes of Mr. Conrad and other rural senators by agreeing to expand the program by pumping $25 billion more into rural hospitals and doctors over 10 years.”

“Mr. Conrad helped negotiate the 2005 highway bill, which critics blasted as a bipartisan exercise in spending excess. The $286 billion bill contained 6,371 earmarks. Even before Mr. Bush signed it, Mr. Conrad told constituents that the bill would deliver $1.5 billion to North Dakota communities. ‘That equates to North Dakota receiving $2 for every $1 in gas tax collected in the state,’ Mr. Conrad said in a news release.”

It would appear that Conrad doesn’t really want to cut spending to rein in deficits. He wants to increase taxes. One might think a proponent of tax increases in a red state like North Dakota would struggle at the ballot box. However, the Wall Street Journal article cites Tax Foundation data showing that North Dakota receives $1.68 in federal spending for every $1 it sends to Washington in taxes. In other words, Conrad’s tax increases would allow him to buy more votes at the expense of taxpayers in other states. A North Dakotan is quoted as saying, “The joke here is that we elect conservatives to state office because we don’t want them to spend our money, and liberals to national office because we want them to spend other people’s money.”

This is a precisely why a return to fiscal federalism is crucial to getting spending-driven deficits under control. In the meantime, let’s stop calling politicians who want to spend more money and increase taxes to pay for it “deficit hawks” or “fiscally responsible.”

That’s the title of a piece in Saturday’s New York Times. That welfare usage is up in a recession isn’t surprising, but if the stigma is truly fading it’s not a positive development. As a Cato essay on food subsidies states, “The [food stamp] program contributes to long-term dependence on government and produces various social pathologies as side effects.” Disturbingly, the USDA official who oversees the program is pleased:

Although the program is growing at a record rate, the federal official who oversees it would like it to grow even faster. ‘I think the response of the program has been tremendous,’ said Kevin Concannon, an under secretary of agriculture, ‘but we’re mindful that there are another 15, 16 million who could benefit.’

There are certainly people in need of assistance, but the government is the wrong delivery system. Michael Tanner sums up why in his book, The Poverty of Welfare:

In the absence of government welfare, the civil society can be expected to rise to the occasion, as it always has, to address the needs of the poor in a way that is both more compassionate and more effective. No government program can provide the degree of flexibility and diversity of private ones. But perhaps more importantly, voluntary, private charity treats both givers and recipients as individuals, fully respecting their worth and dignity. Unlike the coercive nature of government, private charity understands that true charity starts with the individual and that individual’s choice to give out of individual conscience and virtue.

The Times piece goes on to provide anecdotal cases of food stamp recipients who traditionally harbored negative views of the program. In an example of why federalism needs reviving, we learn that one fellow “gave in” when “an outreach worker appeared at his son’s Head Start program.”

The outreach worker is a telltale sign. Like many states, Ohio has campaigned hard to raise the share of eligible people collecting benefits, which are financed entirely by the federal government and brought the state about $2.2 billion last year. By contrast, in the federal cash welfare program, states until recently bore the entire cost of caseload growth, and nationally the rolls have stayed virtually flat.

If the outreach worker is a state government employee as the article appears to indicate, it means his or her salary is funded by taxpayers. This person’s job is to go to a Head Start program, which is also funded by taxpayers, to encourage people to sign up for additional government benefits to be funded by – drum roll – taxpayers.

We would have a more efficient government welfare system if the state governments that wanted to have welfare programs had to fund them using state tax revenues, without the subsidies and incentives for profligacy from Washington. Even better would be to allow individuals to control funding for charitable causes through private contributions without a bloated government welfare system at all.

The state of California recently received $60 million in U.S. Department of Labor stimulus funds to upgrade its 23 year-old unemployment benefits system. But according to the Associated Press, California is yet to spend $66 million it received from Labor in 2002 to upgrade its system. The price tag isn’t whopping by federal standards, but it is another reminder of the need to return to fiscal federalism.

Apparently, the Department of Labor couldn’t care less:

The federal government has no plans to sanction or fine California for not completing the original technology upgrade. The Labor Department said it was more concerned that new stimulus funding is used in a way that will allow more workers to qualify for unemployment assistance.

At the same time, California’s unemployment insurance fund is $7.4 billion in the red, which has forced it to “borrow” $4.7 billion from the federal government. According to an editorial in the Oakland Tribune, California increased the generosity of its unemployment benefits when the economy was healthy, but now that the economy is stagnant spendthrift policies are creating a fiscal crisis.

Alan Reynolds reminds that the federal stimulus package “bribed states to extend benefits — which have now been stretched to an unprecedented 79 weeks in 28 states and to 46 to 72 weeks in the rest.” When you subsidize something you get more of it—federal subsidies prompt more state subsidies to the unemployed, which generates more unemployment. Alan concludes that “the February stimulus bill has added at least two percentage points to the unemployment rate.”

California’s unemployment rate of 12.5 percent is the state’s highest since the end of the Great Depression. Once again we see that when the line of responsibility between federal and state government is blurred, the result is more of both and poor policies compounded.

Over at Flypaper, Andy Smarick can’t figure out what the Obama administration thinks is the proper federal role in education.

A couple of weeks ago, commenting on a speech by U.S. Secretary of Education Arne Duncan, Smarick couldn’t tell whether Duncan was advocating that the feds be friendly Helpy Helpertons, no-excuses disciplinarians, or something in between. Yesterday, Smarick revisited the whither-the-feds theme, pointing out the frustrating contradiction when Duncan both praises local and state education control and blasts states for doing stuff he doesn’t like.

But Duncan isn’t alone in his fuzziness, according to Smarick, who says he’s “yet to come across anyone with a comprehensive, water-tight argument for what the feds should and should not do.”

I’m sure this is not the case, but from reading that you’d think Smarick had never run across a little thing called “the Constitution,” which furnishes just the “water-tight argument for what the feds should and should not do” that he seeks. It also appears that he’s never encountered numerous things that I’ve written pointing this out. For instance, in Feds in the Classroom I wrote:

Because two of the sundry words that do not appear among the few legitimate federal functions enumerated in the Constitution are “education” and “school,” the federal government may have no role in schooling.

Ah, but what of the “general welfare” clause that comes before the enumerated powers in the Constitution’s Article I, Section 8? Doesn’t that give the feds authority to do anything that is in the nation’s best interest? At the very least, doesn’t it break the water-tight seal against federal education intervention?

For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars.

The general welfare clause confers no authority on the federal government, it just introduces the specific, enumerated powers that follow it. Among them, you’ll find not a peep about education.

Many educationists will think me hopelessly retrograde for bringing up the Constitution, although Duncan at least mentioned the dusty old document in his recent federalism speech. Unfortunately, he engaged it with all the courage and gusto of Sir Robin. But at least he acknowledged its existence – too many policymakers and wonks ignore the Constitution completely because it forbids Washington from doing the sundry things they want it to do.

But why shouldn’t the Constitution be treated like an ancient grandfather, a nice old guy whose utterances, in a half-hearted effort to be respectful, we acknowledge in the same tone we’d use with a toddler and then promptly ignore?

Because it is the Constitution that clearly establishes the bounds of what the federal government can and cannot do, that’s why! And because when we ignore the Constitution we get exactly the sort of government that is confounding Smarick: government that is capricious, often incoherent, and is ultimately an existential threat to freedom because government officials can claim power without bounds. See TARP, campaign finance, and executive pay for just a few examples of this last threat coming to fruition.

Which leaves all of the people who want Washington to have some role in education, but are frustrated by not knowing what else the feds might do, with only one choice. They can either continue to face inscrutable and ultimately unlimited federal power in hopes of getting what they want, or they can acknowledge what they keep choosing to ignore: That the Constitution is the supreme law of the land, and it gives the federal government no authority to govern American education.

Today is the first Monday in October, and so is First Monday, the traditional start of the Supreme Court term. The Court already heard one argument – in the Citizens United campaign finance case – but it had been carried over from last year, so it doesn’t really count.

In any event, continuing its trend from last term, the Court has further front-loaded its caseload – with nearly 60 arguments on its docket already. Fortunately, unlike last year, we’ll see many blockbuster cases, including:

the application of the Second Amendment to state gun regulations;

First Amendment challenges to national park monuments and a statute criminalizing the depiction of animal cruelty;

an Eighth Amendment challenge to life sentences for juveniles; a potential revisiting of Miranda rights;

notably in these times of increasing government control over the economy, the “reasonableness” of mutual fund managers’ compensation.

Cato has filed amicus briefs in many of these cases, so I will be paying extra-close attention.

Perhaps more importantly, we also have a new justice – and, as Justice White often said, a new justice makes a new Court. While Sonia Sotomayor’s confirmation was never in any serious doubt, she faced strong criticism on issues ranging from property rights and the use of foreign law in constitutional interpretation to the Ricci firefighters case and the “wise Latina” speeches that led people to question her commitment to judicial objectivity. Only time will tell what kind of justice Sotomayor will be now that she is unfettered from higher court precedent – and the first term is not necessarily indicative.

Key questions for the new Court’s dynamics are whether Sotomayor will challenge Justice Scalia intellectually and whether she will antagonize Justice Kennedy and thus push him to the right. We’ve already seen her make waves at the Citizens United reargument – questioning the scope of corporations’ constitutional rights – so it could be that she will decline to follow Justice Alito’s example and jump right into the Court’s rhetorical battles.

S. 1536, the “ALERT Drivers” Act (“Avoiding Life-Endangering and Reckless Texting by Drivers” – get it?) would reduce federal highway funds available to states if they don’t pass laws prohibiting people from writing, sending, or reading text messages while driving.

The circle is complete. Senators, who were once chosen by state legislatures, now believe it is their role to tell state legislatures what to do.

Federal command over our lives, in ever more intricate detail. It’s the product of exalting democracy – in this case, direct election of senators – over liberty and over the governmental structure originally established in the constitution.

Texting while driving is dangerous to your health and others’. Letting governments amass power is dangerous to your freedom, and ultimately your health (this way, for example, and this way and this way).

The Senate Homeland Security and Governmental Affairs Committee held a hearing yesterday on the REAL ID Act and the REAL ID revival bill, known as PASS ID. I attended and want to share with you some highlights.

Good News!

Little good came from the hearing, as it was primarily focused on how to get the states and people to accept a national ID. But there is some good news.

First, Department of Homeland Security Secretary Janet Napolitano declared REAL ID dead (much as I did in my testimony two-plus years ago). “DOA” is how she referred to it.

She also said that no state will be in compliance with REAL ID by the current December 31, 2009 deadline. This is important because a lot of people think that states doing anything about the security of drivers’ licenses and ID cards are complying with REAL ID.

Another highlight was the commentary of Senator Roland Burris (D-IL). He is a beleaguered outsider to the Senate and evidently wasn’t coached on the talking points around REAL ID and PASS ID. So he flat out asked why we shouldn’t just have “a national ID.”

Senator Susan Collins’ (R-ME) nervous smile was particularly noticeable when Burris asked why the emperor had no clothes. No one was supposed to talk about national IDs at this hearing! But that’s what PASS ID is.

REAL ID and PASS ID are two versions of the same national ID system, and nobody is denying it. That’s good news because the effort to rebrand REAL ID through PASS ID has failed.

A Fake Crisis

Some other issue-framing is worth pointing out. Chairman Lieberman and Secretary Napolitano took pains to point out the importance of acting on PASS ID soon, claiming that the TSA would have to seriously inconvenience travelers with secondary searches at the end of the year if nothing was done.

But this is the same “crisis” that the DHS navigated a little over a year ago. States across the country were refusing to implement REAL ID. The DHS Secretary rattled his saber about inconveniencing travelers. And the DHS Secretary ended up giving all states a deadline extension. Secretary Napolitano will do the same thing if PASS ID fails - saber-rattling included. There is no crisis.

By testifying in support of PASS ID, Vermont governor Jim Douglas (R) put himself on record as supporting a U.S. national ID. He can pretend it’s not a national ID, of course, and he did his best to paper over the issue when Senator Burris asked about it. But Governor Douglas supports a national ID.

There was a time when Republicans stood for resisting federal incursions on state power. In the 104th Congress, the Senate Judiciary Committee had a subcommittee that focused on federalism and the preservation of state power (the Subcommittee on the Constitution, Federalism, and Property Rights). But the National Governors Association, with Douglas at the helm, is now in the process of negotiating the sale of state power over driver licensing and identification policy to the federal government.

Rampant Security Ignorance

The reason why he supports this national ID law, Governor Douglas said, is that he, like every governor, “is a security governor.”

With so many Senators and panelists conjuring security and the 9/11 Commission report, it would be a delight if someone actually examined the security benefits of a national ID. The information is there for them. Again, my testimony to the committee two years ago supplied at least some. Then, I said, “Implementation of REAL ID would impose more costs on our society than it would provide in security or other benefits,” and I articulated how and why a national ID fails to secure.

But Senator Lieberman said he “assumes” REAL ID provides national security benefits. Assumes? He and his staff apparently haven’t familiarized themselves with the level of national security that a national ID would create, taking into account the counterattacks and complications of such a system.

Five years after the vaunted 9/11 Commission report - and the three-quarters of a page it devoted to identity security - Senator Lieberman, the chairman of a committee dealing with domestic security, has yet to look into the merits.

In case Senator Lieberman needs some help …

I’m So Sick of the 9/11 Commission Report!

Speaking of the 9/11 Commission, it has been five years since that report came out, and people continue to parrot the line that REAL ID was a “key 9/11 Commission recommendation.”

The 9/11 Commission dedicated three-quarters of a page to the question of identity security, out of 400+ substantive pages. Its entire treatment of the subject is on page 390.

The 9/11 Commission did not articulate how a national ID system would defeat future terror attacks. It did not even articulate how a national ID would have defeated the 9/11 attacks had it been in place. A minor shift in behavior by the 9/11 attackers, such as using their passports to board planes, would have defeated REAL ID and PASS ID, were we somehow allowed “do-overs.”

We are not allowed “do-overs,” and the problem we face is not 9/11, but securing against current and future threats - including people who might shift their behavior in light of security measures we take.

These shifts in behavior might include taking a few extra steps to get the documentation they need, for access to the country or targets. These shifts in behavior might include attacking targets that do not require documentation. Identity-based security is a Maginot Line.

The 9/11 Commission report was written at a time when little research on identity-based security had been done. It was written by fallible humans who knew little about identity-based security, and who got it wrong. The report is not a religious text.

The report did say something important, though: “For terrorists, travel documents are as important as weapons”! (page 384) It’s a terrific turn of phrase because it shuts down the logic centers in the brain - eek, terrorists! - and ends the discussion.

The “travel documents” the report was talking about, though, were passports and visas, not drivers’ licenses and birth certificates - the things foreign terrorists use to get into the country. If we’re going to turn the driver’s license into an internal passport - and TSA checkpoints are the beginning of such a policy - then perhaps these are travel documents. Just, please, Secretary Napolitano, train your TSA agents to not say, “Your papers, please.”

Even as to international travel documents, though, the 9/11 Commission got it wrong. Weapons are the only things as important as weapons. And the 9/11 terrorists didn’t actually use weapons any more substantial than box cutters. They “weaponized” a non-weapon. (Security is complicated, you see.)

Denying terrorists travel documents, drivers’ licenses, and IDs simply presents them some inconveniences - such as using people with no record of terrorism. Seventeen of nineteen 9/11 attackers were unknown to U.S. officials as threats, so it’s obviously not that much of an inconvenience.

Evading identity-based security is so easy. People do it all the time. And it won’t stop under anyone’s version of a national ID. But the 9/11 Commission said …

Something New to Worry About

Much of the national ID battle happens at the federal level with these national ID laws, of course, but it’s important to realize that federal officials, state officials, companies, and non-profit groups are working to knit together a cradle-to-grave national ID system no matter what happens with REAL ID and PASS ID.

Here’s one worth highlighting: Thirteen states apparently are already scanning, or have scanned, their birth certificates into databases for use in the national ID system. The effort is being led by the National Association for Public Health Statistics and Information Systems in Silver Spring, Maryland. This group will undoubtedly have access to your private health information should federal e-health records be implemented, so you might want to familiarize yourself with them.

Is your state one of them? How many copies of your birth certificate can be found in how many places around the country? You might want to ask your state legislators about that. The future of this effort is to collect biometrics at birth, of course. This is a privacy problem.

But maybe all the privacy concerns have been taken care of. The proponents of REAL/PASS ID found themselves a fig leaf on that score.

Token Cover on Privacy Issues

Ari Schwartz from the Center for Democracy and Technology testified in favor of PASS ID. (Senator Akaka noted in his opening statement that CDT endorses PASS ID.)

He characterized opponents of REAL/PASS ID as wanting to “do nothing.” It’s a classic ploy - but cheaper than we’re used to seeing from Ari and CDT - to mischaracterize opponents as wanting to “do nothing.” As Ari knows well, I have advocated endlessly for a diverse and competitive identification and credentialing system that would provide all the security ID systems can, without government surveillance.

But Ari testified imaginatively about how PASS ID makes a national ID okay. He has concerns with it, of course, yadda yadda yadda - the privacy fig leaf obliged to wear a fig leaf himself.

And this is the unexpected bad news from the hearing. The Center for Democracy and Technology supports having a national ID in the United States.

Many would find this inexplicable, but it’s not. Though the people who work at CDT personally want very much to do the right thing, there are no principles to the organization beside compromise and having a seat at the table (neither of which are actually principles, of course).

CDT plays a wonderful convening role on many issues, and the name of the organization implies that it reconciles technology programs with fundamental societal values. But here it has given political cover to the push for a national ID in the United States. One can’t help wondering if there is anything that would cause CDT to push back from the table and say No.